UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file numbers 33-50884, 33-84480, 33-90272
Northbrook Life Insurance Company
(Exact name of Registrant as specified in its charter)
__________Illinois__________ __________36-3001527__________
(State or Other Jurisdiction, (IRS Employer Identification No.)
Incorporation or Organization)
3100 Sanders Road
Northbrook, Illinois 60062
(Address of Principal Executive Offices) (Zip Code)
708.402.5000
(Registrant's Telephone Number, including Area Code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES _X_ NO ___
State the aggregate market value of the voting stock held by non-affiliates
of the registrant: NONE
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of June 30, 1995: Common stock, par value of $100 per
share: 25,000 shares outstanding.<PAGE>
Northbrook Life Insurance Company
(Registrant)
INDEX
Page
Cover Page
Index
PART I - Financial Information
Item 1. Financial Statements
Statements of Financial Position
June 30, 1995 (Unaudited) and December 31, 1994 1
Statements of Income (Unaudited)
Periods Ended June 30, 1995 and June 30, 1994 2
Statements of Cash Flows (Unaudited)
Periods Ended June 30, 1995 and June 30, 1994 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 5
PART II - Other Information
Item 1. Legal Proceedings 6
Item 2. Change in Securities 6
Item 3. Defaults Upon Senior Securities 6
Item 4. Submission of Matters to a Vote of Security Holders 6
Item 5. Other Information 6
Item 6. Exhibits and Reports on Form 8-K 6
Signature Page<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF FINANCIAL POSITION
June 30,
(Unaudited) December 31,
($ in thousands) 1995 1994
Assets
Investments
Fixed income securities
Available for sale, at fair value
(amortized cost $61,314 and
$61,581) $ 63,753 $ 59,191
Short-term 1,972 3,374
Total investments 65,725 62,565
Amounts recoverable from Allstate Life
Insurance Company under reinsurance
treaties 2,752,783 3,085,781
Cash 101 59
Deferred income taxes 77
Net receivable from affiliates 59,755 46,608
Other assets 15,259 21,775
Separate Accounts 2,928,686 2,604,623
Total assets $ 5,822,309 $ 5,821,488
Liabilities
Reserve for life insurance policy
benefits $ 137,441 $ 120,328
Contractholder funds 2,626,086 2,965,146
Deferred income taxes 2,188
Other liabilities and accrued expenses 53,666 61,889
Separate Accounts 2,928,686 2,604,623
Total liabilities 5,748,067 5,751,986
Shareholder equity
Common stock 2,500 2,500
Additional capital paid-in 56,600 56,600
Unrealized net capital gains and losses 1,585 (1,553)
Retained income 13,557 11,955
Total shareholder equity 74,242 69,502
Total liabilities and
shareholder equity $ 5,822,309 $ 5,821,488
See notes to financial statements.
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30 June 30
(Unaudited) (Unaudited)
($ in thousands) 1995 1994 1995 1994
Revenues
Investment income, less
investment expense $ 1,192 $ 731 $ 2,409 $ 1,410
Realized capital gains
and losses 0 (14) 67 (14)
Income before income
taxes 1,192 717 2,476 1,396
Income tax expense 421 244 874 474
Net income $ 771 $ 473 $ 1,602 $ 922
See notes to financial statements. <PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
Six Months Ended
June 30
(Unaudited)
($ in thousands) 1995 1994
Cash flows from operating activities:
Net income $ 1,602 $ 922
Adjustments to reconcile net income to net
cash from operating activities:
Net realized capital (gains) and
losses (67) 14
Amortization and other non-cash items 317 299
Net change in reserve for policy benefits
and contractholder funds 22,996 628
Change in deferred income taxes 575 486
Changes in other operating assets and
liabilities (27,241) (220)
Net cash from operating activities (1,818) 2,129
Cash flows from investing activities:
Fixed income securities available for sale:
Proceeds from sales 5,423 0
Investment collections 3,511 5,657
Investment purchases (8,476) (10,698)
Net change in short-term investments 1,402 3,439
Net cash from investing activities 1,860 (1,602)
Net increase in cash 42 527
Cash at beginning of year 59 214
Cash at end of year $ 101 $ 741
See notes to financial statements.
<PAGE>
NORTHBROOK LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. Financial Statements
The Statement of Financial Position as of June 30, 1995, the Statements
of Income for the three-month and six-month periods ended June 30, 1995 and
1994 and the Statements of Cash Flow for the six-month periods then ended
are unaudited. The interim financial statements reflect all adjustments
(consisting only of normal recurring accruals) which are, in the opinion of
management, necessary for a fair statement of the results for the interim
periods presented. The financial statements should be read in conjunction
with the financial statements and notes thereto included in the Northbrook
Life Insurance Company 1994 Financial Statements. The results of operations
for the interim periods should not be considered indicative of results to be
expected for the full year.
Certain reclassifications have been made to the prior year financial
statements to conform to the presentation for the current year.
2. Transactions with Affiliates
Revenues ceded to Allstate Life Insurance Company consist of premiums and
contract charges of $1,278,000 and $22,974,000 for the six-month period
ended June 30, 1995 and $738,000 and $17,757,000 for the six-month period
ended June 30, 1994. Benefits and expenses ceded to Allstate Life consist
of paid benefits, credited interest on reinsured contracts and operating
expenses. These benefits and expenses amounted to $113,179,000 and
$137,604,000 for the six-month periods ended June 30, 1995 and 1994,
respectively.
<PAGE>
Northbrook Life Insurance Company
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Three- and Six-Months Ended June 30, 1995
General
Northbrook Life Insurance Company ("the Company") is wholly owned by
Allstate Life Insurance Company ("Allstate Life"). Allstate Life is
wholly-owned by Allstate Insurance Company, a wholly-owned subsidiary of
The Allstate Corporation ("the Corporation"). Sears, Roebuck and Co.
distributed its 80.3% ownership in the Corporation on June 30, 1995 to Sears
common shareholders through a tax-free dividend. As a result of the
distribution, Sears no longer has an ownership interest in the Corporation.
The Company issues single and flexible premium annuity contracts and
universal life insurance policies. In addition, the Company issues flexible
premium deferred variable annuity contracts. Dean Witter Reynolds, Inc. is the
sole distributor of the Company's flexible premium deferred variable annuity
contracts, and certain single and flexible premium annuities.
The Company reinsures all of its insurance in force with Allstate Life.
Accordingly, the results of operations with respect to applications received and
contracts issued by the Company are not reflected in the Company's Statements of
Income.
Results of Operations and Financial Condition
Pre-tax net investment income in the second quarter of 1995 increased 71.4%
to $1.2 million compared to $.7 million for the same period in 1994. For the
first six months of 1995 pre-tax net investment income increased 71.4% to $2.4
million compared to $1.4 million in the prior year. The increases were
primarily related to an increased level of invested assets which resulted
from a $25 million capital contribution from Allstate Life at the end of
December 1994. Net income reflects the changes in pre-tax net investment
income.
The Statement of Financial Position at June 30, 1995 reflects a decrease in
contractholder funds and amounts recoverable from Allstate Life Insurance
Company under reinsurance treaties of 11.4% and 10.8%, respectively, and an
increase in Separate Accounts of 12.4% from December 31, 1994. This is
primarily due to policyholder transfers from fixed annuities invested in the
Company's general account to variable annuities which are invested in the
funds of the Separate Account as well as fixed annuity surrenders, sales of
the variable annuity product and favorable investment performance of the
Separate Account funds.
Liquidity and Capital Resources
Under the terms of the reinsurance agreement with Allstate Life, assets of
the Company that relate to insurance inforce, excluding Separate Account assets
and, beginning in 1995, assets related to certain market value adjusted annuity
contracts under employee benefit plans, are transferred to Allstate Life.
Therefore, the funds necessary to support the operations of the Company are
provided by Allstate Life and the Company is not required to obtain additional
capital to support inforce or future business.
Pending Accounting Standards
In March 1995, the Financial Accounting Standards Board issued SFAS No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of". The statement requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The statement requires
that impairment loss be measured for those assets as the amount by which the
carrying amount of the asset exceeds the asset's fair value. This statement
will be adopted in 1996 and is not expected to have a material impact on the
Company's results of operations or financial position.
<PAGE>
PART II
Item 1. Legal Proceedings
Northbrook Life Insurance Company is not involved in any litigation that
is expected to have a material effect.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits, Financial Statements and Reports on Form 8-K
(a) (1) and (2) Financial Statements of registrant are listed on pages
hereof and are filed as part of this Report.
(a) (3) Exhibits
Regulation S-K
2. Not applicable.
3. Incorporated by reference to Registrant's Form S-1 Registration
Statement, Registration No.33-50884, filed March 30, 1993.
4. Northbrook Life Insurance Company Flexible Premium Deferred Annuity
Contract, incorporated by reference to Registrant's Form S-1
Registration Statement, Registration No. 33-50884, filed March 30,
1993.
10. Incorporated by reference to Registrant's Form S-1 Registration
Statement, Registration No. 33-50884, filed March 7, 1995.
11. Not applicable.
15. Not Applicable.
18. Not Applicable.
19. Not Applicable.
22. None.
23. Incorporated by reference to Registrant's Form S-1 Registration
Statement, Registration No.33-50884, filed March 30, 1993.
24. Incorporated by reference to Registrant's Form S-1 Registration
Statement, Registration No.33-50884, filed March 30, 1993.
27. Filed herewith.
99. None.
(b) Reports on 8-K: No reports on Form 8-K were filed during the second quarter
of 1995.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Northbrook Life Insurance Company
(Registrant)
Signature Title Date
______________________ President and Chairman August 11, 1995
LOUIS G. LOWER, II (Principal Executive Officer)
______________________ Assistant Vice President August 11, 1995
BARRY S. PAUL (Chief Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STMTS OF
FINANCIAL POSITION, STMTS OF CASH FLOWS AND STMTS OF INCOME; NOTES THERETO AND
MANAGMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE PERIODS ENDED JUNE 30, 1995 AND JUNE 30, 1994 OR DECEMBER 31,
1994.
</LEGEND>
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<NAME> NORTHBROOK LIFE INSURANCE COMPANY
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